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Objectives: To describe hospital utilization and costs associated with preterm or low birth weight births (preterm/LBW) by payer prior to implementation of the Affordable Care Act and to identify areas for improvement in the quality of care received among preterm/LBW infants., Methods: Hospital utilization-defined as mean length of stay (LOS, days), secondary diagnoses for birth hospitalizations, primary diagnoses for rehospitalizations, and transfer status-and costs were described among preterm/LBW infants using the 2009 Nationwide Inpatient Sample., Results: Approximately 9.1 % of included hospitalizations (n = 4,167,900) were births among preterm/LBW infants; however, these birth hospitalizations accounted for 43.4 % of total costs. Rehospitalizations of all infants occurred at a rate of 5.9 % overall, but accounted for 22.6 % of total costs. This pattern was observed across all payer types. The prevalence of rehospitalizations was nearly twice as high among preterm/LBW infants covered by Medicaid (7.6 %) compared to commercially-insured infants (4.3 %). Neonatal transfers were more common among preterm/LBW infants whose deliveries and hospitalizations were covered by Medicaid (7.3 %) versus commercial insurance (6.5 %). Uninsured/self-pay preterm and LBW infants died in-hospital during the first year of life at a rate of 91 per 1000 discharges-nearly three times higher than preterm and LBW infants covered by either Medicaid (37 per 1000) or commercial insurance (32 per 1000)., Conclusions: When comparing preterm/LBW infants whose births were covered by Medicaid and commercial insurance, there were few differences in length of hospital stays and costs. However, opportunities for improvement within Medicaid and CHIP exist with regard to reducing rehospitalizations and neonatal transfers.